On the 1st of January an investor purchases a one-year forward contract on a security with a current price of 50. The security is expected to pay an income of 3 on 1st October and the risk-free force of interest is 10% per annum. On 1st March the security has a current price of 90 and the risk-free force of interest is now 15% per annum. (ii) On the 1st of January explain which party to this financial transaction holds a short forward position and which party holds a long forward position. [2] Calculate the price of the forward contract issued on 1st January. [3] Calculate the price of a new forward contract issued on 1st March. [3] Hence, on the 1st March calculate the value of the original forward contract issued on the 1st January to the holder of the long forward position. [4] (iv) On the 1st of January an investor purchases a one-year forward contract on a security with a current price of 50. The security is expected to pay an income of 3 on 1st October and the risk-free force of interest is 10% per annum. On 1st March the security has a current price of 90 and the risk-free force of interest is now 15% per annum. (ii) On the 1st of January explain which party to this financial transaction holds a short forward position and which party holds a long forward position. [2] Calculate the price of the forward contract issued on 1st January. [3] Calculate the price of a new forward contract issued on 1st March. [3] Hence, on the 1st March calculate the value of the original forward contract issued on the 1st January to the holder of the long forward position. [4] (iv)